OneRoof and its data partner Valocity look at key data points to find out where first home buyers should be directing their efforts. The interactive table below indicates which New Zealand city offers the best opportunities for buyers with budgets of less than $1m.
Dunedin has the most sub-$1m suburbs but Auckland has the most sub-$1m listings and properties while Invercargill has the highest share of sub-$1m suburbs and properties, as well as the lowest median sale price for first home buyers in the first half of 2022. Ashburton has the highest share of sub-$1m listings. Queenstown-Lakes is bottom in every "affordability" category except one.
The gap between the median sale price for first home buyers and the overall median sale price is widest in the city, which suggests first home buyers are getting more of a discount in Queenstown-Lakes than elsewhere.
The second chart highlights the Auckland suburbs that are likely to yield the best results for first home buyers and those that aren't. Where a suburb sits on the chart depends on the number of sub-$1m listings it had on OneRoof on Aug 20, 2022 and its average property value.
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Auckland Central, which is dominated by apartments, is the clear winner in terms of affordability and number of sub-$1m listings, but also scoring highly are Manurewa, Papatoetoe and Papakura, all in Auckland's south. Remuera and Orakei are the least favourable suburbs for buyers looking in the sub-$1m bracket.
With property prices so high even in a falling market it can be tough for single first home buyers to get on the property ladder.
But Hannah McQueen, founder of enableMe financial advice firm, says don’t despair.
Singles don’t have to give up on the dream but they may have to take a different route to home ownership, she says.
Stretching themselves with too much debt is not sustainable, nor the most productive use of their money, but McQueen says the company has many single clients it has helped to buy an investment property before their first home to live in.
That allows the house to be in a different location to where they live and work, and the property can be less expensive.
“They’ve worked away repaying the debt on that to speed up creating as much equity as possible to take the next step.
Enable founder Hannah McQueen says buying an investment property before a first home to live in is an option for those looking to get on the property ladder. Photo / Viva
“Sometimes that’s a second investment property before their eventual home, and sometimes they later want to join forces with someone else.”
McQueen says when any first home buyer buys a home they make trade-offs to get on the property ladder, be that the town, the suburb, the number of bedrooms and the size of the backyard, but people are sometimes reluctant to look at other trade-offs.
“Like, what if we joined forces with a family member, what if we invested first, what if we invested together?
“There’s no doubt it’s difficult but there are other options to explore if you’re willing to consider them.”
Over-investing in a home is not a great financial strategy in general terms as it does not generate income and usually costs more than renting, McQueen says.
“I’d always encourage people to be preserving their ability to invest outside of what they plough into their homes, if they can.”
